A decisive end to the Iran war is still far away and, as a result, the economic recovery in the Gulf will be slow and bumpy. A return to pre-war energy exports is unlikely until at least early next year and non-oil activity will be held back by a lack of fiscal support, interest rate hikes and struggling tourism sectors. We think consensus forecasts are underestimating the scale of the economic damage. In North Africa, Egypt and Morocco are coping well with spillovers from the war but, in Tunisia, the risk of a disorderly devaluation and sovereign default is growing.